Tracking finance charges on car loan

When I set up my Sentra Car Loan in 2003, I apparently did not set it up as a loan so as to break out the finance charges for me. It simply appears under property and debt. When I added my Jeep Liberty this year, I did it correctly and when making a payment, Quicken automatically shows the interest and principal. I have gone through all the help menus trying to find a way to convert this to a loan and can find nothing. Am I missing something or must I create a new loan and then delete the old account? Will this cause major problems? I am using Quicken Deluxe 5 Release R 3 and Windows XP Professional. Thanks, Jan

Reply to
JaniceKD
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Is the "old account" an Asset (for the car itself), or a Liability (for the loan for the Sentra) (you explanation isn't completely clear to me)?

If it's a liability, then you'll need to set up a new loan account (you can start with the current balance) and just go forward.

If it's an Asset ... then you still create a loan/liability account and go forward.

You're correct that you can't convert either.

BTW, how have you been recording your payments on the Sentra? Have you been splitting the payment into interest and principal manually? Or just recording everything as "Car Payment"?

Dan

Reply to
danbrown

~~~~~Is the "old account" an Asset (for the car itself), or a Liability (for the loan for the Sentra) (you explanation isn't completely clear to me)? ~~~~~~~

The is Sentra listed under Property and Debt Accounts as a Liability as is the Jeep....however, the Jeep is also listed under Loan Accounts Summary and that's what I want to do with the Sentra...I believe I may have set this up using Quicken Deluxe 2002 so I don't remember much about the setup although it did ask me for the interest rate and I was then surprised that it didn't seem to use the info.

So far, I just record everything as "Car Payment" and since the Car Company does not give me a breakdown, I am clueless and I don't like it.

I guess I'm confused as to whether I set up the new account as a loan and then delete the old account....Any precise information is appreciated....Thanks, Jan

Reply to
JaniceKD

Well, if you're making interest payments on the Sentra, the lender is required by federal law to provide you with a annual summary of what went to principal and what went to interest (IRS form 1099).

If they're not providing that, is it possible that you're on a lease rather than a loan? And that at the end of the lease the company is going to take back the car?

The accounting (and tax treatment) of a lease is quite different than that for a loan/purchase.

Dan

Reply to
danbrown

No..this is a straight financed loan with 2.9% interest....I was under the impression that a 1099 showed extra income. I have never received one for any car we've ever purchased and financed in almost 40 years.

The Jeep is being financed the same way and Chrysler just shows payment due and not how the payment is divided. That's why I like the Loan aspect of Quicken because now I have a general idea.

Anyway..if I create the loan will I be duplicating a liablilty [and screwing up all my registers] or will it just be an additional way of tracking....

Jan

Reply to
JaniceKD

I thought 1099's are issued for income/interest that is reportable on ones US tax return. Thus, since an auto loan's interest is not reportable on a personal return, there would not be a 1099 issued. ATM I don't have TT installed so I can't easily verify this.

However my above statement does not take into consideration a business return, on which the interest may be deductible. But the OP did not state one way or the other whether these were personal or business purchases.

Reply to
Disciple

This isn't a business transaction...simply keeping my home finances in order...

I've been using Quicken since 1994 and every year I try to fine tune catagories and reports just a little more.

Thanks, Jan

Reply to
JaniceKD

I did not think so, but the clarification is good. Also I hope my post will bring a clarification about when 1099's are issued .

Good luck. I am a Quicken user since the very early DOS days, and still can't leave well enough alone. :)

Reply to
Disciple

"Personal interest is not deductible. Personal interest is ... (edited out) It includes the following items: Interest on car loans (UNLESS YOU USE THE CAR FOR BUSINESS)." {empahsis added}.

Now, how can the lender POSSIBLY know if you used the car for business or not??? They can't. Which is why they're required to provide the information on interest paid.

Reply to
danbrown

True, unless the lender takes the time to note whether the loan was made to say Dan Brown or to Dan Brown's Quicken Tutorial Service.

Reply to
Disciple

"Now, how can the lender POSSIBLY know if you used the car for business

or not??? They can't. Which is why they're required to provide the information on interest paid. "

Form 1099 is for reporting income to the taxpayer. Note that corporations do not get 1099s. The reporting is to make sure individuals report the proper income.

Form 1098 is for reporting interest expense to the taxpayer. Right now, only mortgage interest and student loan interest is required to be reported. Car loans are not required to be reported.

Reply to
Charlie K

Let me just jump in here and report that this morning I created a loan for the Sentra with no problems. I then made a payment and it broke out the interest for me. I didn't have to do anything with the original liability account I had created.

Thanks for all the help, Jan

Diplomacy is the art of saying 'Nice doggie' until you can find a rock.

Will Rogers

Reply to
JaniceKD

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